What financial service providers can learn from mobile gambling

August 1st, 2016

Mobile phone based gambling has taken off in Kenya in the past 18 months. Although it’s not a financial service, it uses familiar channels and devices, raising questions of whether there are features of mobile gambling that financial service providers could learn from. Also, FSD Kenya is concerned that at a societal level, the craze for gambling could destabilize existing financial practices and undermine established habits of savings and livelihoods. FSD Kenya therefore asked Bankable Frontier Associates (BFA) to do some qualitative research into the phenomenon of mobile gambling in Kenya. Anne Gachoka of BFA reports on her findings in five parts.

Betting is not new to Kenya; the practice has been legal since 1966 when the Betting, Lotteries and Gaming Act was enacted. In the past two years, however, Kenya has seen a substantial rise in highly visible mobile phone-based betting. Bloggers have claimed that the largest of these sports betting providers, SportPesa, has over 2 million registered users. While the number of registered users could not be verified, internet rating site confirmed that SportPesa has 1.1 million unique visitors to its website every month. Considering SMS-based users, less frequent users, and users of other betting sites, it is possible that the number of mobile bettors in Kenya tops 2.5 million – more than 10% of adults.

This blog series covers the betting patterns and financial habits of 27 bettors in a range of different settings, including upmarket sports bars, video halls in Mukuru ka Njenga (a Nairobi slum), and a low-income area in Nairobi called Kariobangi north. The most commonly used mobile betting providers are SportPesa and Betway.

Most of the bettors interviewed were men. This conforms to’s data that rate SportPesa users as mostly male and likely college educated. The few women bettors interviewed said that they were influenced by their friends and customers – not their husbands – to take up the habit. Whereas most of the male bettors had long been fans of football, the women did not know much about the game; most simply placed bets based on advice from male friends.

All the respondents placed bets solely on football, even though mobile sports betting companies offer bets on other sports, such as volleyball, tennis, rugby, basketball, and cricket. The English Premier League is the most popular football league among bettors. Fans would like to bet on Kenyan football teams but the local leagues are not yet available on the betting sites (even though SportPesa sponsors several local teams).

Most respondents reported taking part in some form of gambling even before the advent of mobile sports gambling. They used to bet on neighborhood games such as cards and pool, for example. But a few things have changed, including the frequency of betting, the privacy of using their mobile phone, and the attraction of potentially winning large amounts, which later blogs will discuss in more detail.

The blog series also covers the divergent views on the effects of gambling of low-income versus middle-income bettors. Most low-income earners viewed mobile sports gambling as the best thing that has ever happened to them. They all believed they were winning (although subsequent analysis of their statements showed that most had been losing). Even when they lost they were hopeful that the next bet they placed might win. One low-income respondent, ‘Richard,’ was not deterred by the fact that he had never had a single win in three months of gambling several times a week. He felt sure eventually he would win big.

On the other hand, middle-income bettors opined that mobile gambling should be banned. They cited its various negative effects, including that it might lead to unemployment in the country eventually. A middle-income respondent, ‘Joshua,’ recounted, “People have stopped working – especially the casual laborers – and they spend time betting on mobile sports.”

Both low- and middle-income bettors said they usually bet KES 100 (the minimum amount on several sites), but some bet as low as KES 10 on other sites that allowed for smaller amounts. On days when football games took place, bettors would place two to three bets in a single day (incurring net losses of KES 300-400 per week). While this amount is small change to middle-income bettors, lower-income bettors claimed that they made up for it by reducing their consumption of beer and miraa. Some respondents also said they had reduced their contributions to savings and chamas to pay for their betting habits. Read the second blog in this series to learn more about gambling behavior and its effect on expenditure.

Subsequent blogs in this series will cover why bettors are attracted to mobile phone-based betting, how the practice affects their social and financial behavior, as well as what financial service providers might be able to learn from the likes of SportPesa and Betway.

Read about displaced expenditure in Kenya’s online betting world in part two of this five-part blog series.

Click here for a detailed history of sports betting in Kenya on the SportsKenya blog.

See Curtis Kiiti blog on SportPesa

Although a large number, this growth is slower than the growth of mobile banking products such as M-shwari and KCB M-PESA in their first 1-2 years. CGAP reported that M-swhari had over 10 million customers at the end of year 2 and KCB M-PESA claimed 5.2 million at the end of the first year.

Indeed SportPesa has just announced sponsorship of one of the English Premier League teams, Hull City



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